A worker hauls straw in October 2015 to a biomass power plant owned by the embattled Kaidi Ecological in East China’s Anhui province. Photo: IC

The crisis threatening the survival of one of China’s biggest biomass power producers looks set to deepen as the listed unit of debt-ridden Sunshine Kaidi New Energy Group Co. Ltd. faces the possibility of defaulting on yet another bond, and the chances of help from local governments as part of the stock market rescue strategy grow dimmer.

After months of turmoil and a string of failed restructuring efforts, investors are increasingly doubting that Sunshine Kaidi is just another victim of an overly ambitious debt-fueled expansion in a segment of the clean energy industry that failed to get support at the highest level of government. Instead, they fear the company is an elaborate fraud engineered by the company and its chairman Chen Yilong, who jumped on the bandwagon of green power and poverty alleviation and took advantage of lax regulation.